tv Bloomberg Markets Bloomberg December 4, 2015 10:00am-12:01pm EST
betty: from bloomberg world headquarters, good morning. i'm betty liu. here's what we are watching at this hour. it is all about the jobs market. adding. job market 211,000 jobs. clearing the way for the fed left off later this month. we have oil prices falling as well. oil prices set to be raising outputs in the face of a loyal -- global oil glut. and we will take you to the paris climate conference. mike bloomberg will be on with us about creating a cleaner planet. we have that happen hour into the trading session. i want to head to the market desk where matt miller has his eye on this rally on the back of the jobs data. matt: the jobs number beating ß
expectations. mine were a little higher, but 211,000 is enough to push this market up. we are seeing gains of about 1% across the board. question --es the why would markets rally at the chances of raising interest rates are even closer now than they were before? up and that shows what future markets are reporting the chances that a rate rise are at. i have the chart here and it is just up, up, up. at one point, they were 78% today. darn sure that janet yellen will raise rates in december. betty: instead of seeing yields up, they are down. matt: very weird. you would typically see people
sell bonds ahead of a rate rise. in any case, take a look at the front end of the curve. the two-year briefly spiked up and then came back down. many people are buying wants right now. and a look at the 10 year see that what the back end of the curve looks like it still buying into the tenure as well. gold is also fascinating as well. it came back down. it is operating at 1000 7930. this is an asset class that you would expect people to sell a head of a rate rise. oil is an interesting story by itself because opec's millionsts ceiling to of barrels of month. i will pull up opec go on my termite now. more than it far ceiling anyway if i.
i you show my terminal here, can show you right now that they are at 32.1 million barrels a month. they are already up what they raise the ceiling to anyway. you might argue that this may not have is big of an oil prices -- you might argue that this may not have as big of an impact on oil prices. thanks sot miller, much. we want to check in on the bloomberg first word news. vonnie quinn has more from the is desk. hasie: the u.s. senate rejected a bill calling for background checks on those buying weapons online and at gun shows. this comes one day after 14 people died at the san bernardino massacre. authorities are looking for a man who bought the two rifles used in the attacks. the weapons were all bought legally more than three years ago. the u.s. has launched a major effort to track down and kill a leader of the islamic state. that is according to an obama
administration official who says that he has gone into hiding. the official says that at the current pace, the u.s. is killing a mid to high level islamic state leader every two days. germany is joining the fight against the islamic state. planarliament approved a to send surveillance planes and 1200 troops into syria. used onlyrs will be in support roles, but is still the riskiest use of force yet by angela merkel. she kept germany out of libya's civil war. progress in the fight against pollution. cities and companies have pleaded to cut and mission. they are being released today at the u.n. climate conference in paris. does it look at our first word news right now. toycan get more on these for hours a day at the new bloomberg.com. i am vonnie quinn. betty: the jobs report is bring
investor confidence that, but not so fast. despite the fact that they added more jobs than predicted, the stocks are fighting the climb upward this morning after a volatile week. we are pretty much ever highs from the session. if from the fast commentary section is michael regan. we are seeing a substantial rally here. it is the bond markets that are a little quizzical at this point. mike: looking at today's market, the story is still the story of yesterday's market. we had wild spasms with the euro of 3% against the dollar. the 10 year treasury yields up 13 basis points. the yields across europe up 20 basis points. it is good to see this rebound. thatbeen concerned whenever you have that currency shot like we saw yesterday after mario draghi, but how long will the ripples for that go on?
interestingly today, the euro is still hanging in there at $1.09. it's not coming back to much after yesterday. treasury yields moving down a little bit, but after 13 basis point move yesterday, not really crashing hard. the equity market is rebounding. betty: what does all that tell you then, mike? is too soon to tell. whenever there is a move like yesterday, they still could be spasms that sort of had to play out. it is encouraging to see the equity market rebounds. move thenumber doesn't needle too much considering janet yellen yesterday and this week basically later on the table and said december it's probably it. she also eased concern about more increases later in 2016 and the pace of them. i think the market has deftly come to terms with the idea of an interest rate increase. betty: maybe this is why you're
seeing yields and treasury come down. this may be bond investors thinking further ahead than equity investors. what is the path of this journey now for rate increases? getting anare engagement from bond investors that the think it will be pretty friendly to the market. michael: i think so. everything was so exaggerated yesterday. over the two days, we are still looking at a pretty good uptake in treasury yields. -- the stockting market is up strong and has not recouped all guess is losses yet. it was down almost 250 points yesterday. the leadership of the equity market today is interesting. it is kind of the defense of staples like health care, utilities that are leading the charge. it is not necessarily a risk on leadership in the equity market. theever you see numbers,
appetite can come back. telecomonsumer staples, , and financials of the top three trading centers. energy is the only the klier dust declined a right now. -- energy is the only declined to write a. r right now. michael: opec quashing that party quickly. betty: how does that set us up for next week? michael: to me, what is fascinated with the market this year is how it is just gravitated to that unchanged 2014 thepared to average of the s&p closes aroughout the year are within point or two of last year's close, which makes you think that the market just does not want to go anywhere this year. despite the ups and downs, the prophet has ground to a halt. everyone is nervous about the
fed. so far, the market has not really one to break out to the new highs. we did set records earlier in the year. the lid onseems like the jar for the s&p 500. time, people get real bullish about not a santa claus rally for whatever reason. the end of the year is often a bullish time. uncertainty about the fed, it's an open question most people's minds. betty: michael regan, thank you so much. for more fast commentary from gadfly, type glike adf. oil prices are plummeting as opec leaders agree to increase production. we will look at who is behind that strategy. what the ministers are saying. much more ahead in the "bloomberg markets." ♪
betty: good morning and welcome back to "bloomberg markets." the bloomberg business flash, a look at the business stories in the news right now. we have to recap today's big headline that better than expected november jobs report. that could lead the fed to raise the interest rates in the first time in almost a decade. employers added almost 211,000 jobs last month. october's gain was revised upward now 22 98,000. the unemployment rate held steady at 5%, the lowest two has
been in more than seven years. all this is raising the odds of the fed is going to tighten its interest rate. nike is defending a contract at .ign decades ago in brazil the u.s. is accusing the former soccer leader of brazil of getting a kick back after signing a $170 million payment. unawareany says it was of any kickbacks and is cooperating with authorities in brazil. you can always get more business news at bloomberg.com. opec is rattling the global oil markets. belowosser wti crude did $40 a barrel a day after opec said it was going to boost not cut production. the increased to 31.5 million barrels a day came amid a meeting in the unit. that is where we find ryan chilcote there in vienna. what was the thinking behind this increase in the target?
ryan: there are probably a couple of reasons. one thing i would say is that when it comes to the formal reasons for increasing the production ceiling, you have a couple things going on. they are already producing well over the previous 30 million barrel a day target. they are producing about 31.5. within a target, they are legitimizing the cheating they were doing. they are decriminalizing the cheating. theirre bringing production ceiling in line with what they were already doing. there is a referred run when the sanctions are removed. them readinge space. maybe there will be cheating, but a little less because there is space. the same holds true for iraq as well. that would be the formal reason perhaps for this big surprise that we have gotten today. betty: the target meeting the reality of what has already been happening.
i know that you spoke with and we also heard with the qatari oil minister who also explains about the dynamics going on right now and the balance shifting in the oil markets. i want to play for our audience a part of what he said about that. >> the strategy is working. the only question remaining is when the market is going to be balanced with the supply and demand. we think that is heading toward the right direction. drop in a huge investment. it will manifest itself through the reduction in oil production. the signs of the reduction are already there. we can see it happening. the markets going to balance itself. with: how do you balance what we just heard from him about how he feels that production is being pulled back in some areas with what we just saw from the overall group? that view you just heard
is very instructive. remember that qataris are part of the saudi faction. channeling the saudi the right there. when he says the strategy is working, what he is talking about is the strategy that saudi arabia introduced last year at the meeting whereby they said, let us let production rise. let's try those high-cost producers that are bothering us with all their supply and eventually the price will increase. increaseot seen the yet, but he says the strategy is working because we are seeing some show producers obviously experience a bit of pain. another explanation for why we have seen this production ceiling rise according to one delegate is that the media still underway. this is one delegate talking the bloomberg saying that they raise theyeiling is not because want to formalize cheating. they want to punish the shale producers. to punish the non-opec producers.
they know they have got them against the ropes. it oil goes below $40 a barrel, and a lot of show producers in north dakota and texas are going to get cash calls on monday morning. of pain.ist aim 11 out of 12 of the opec countries can balance the budget at these oil prices this year, including the saudi's. out.can wait it this is not fun for anybody right now, but we have got to push a little bit farther. we can take them out of the game. this is the saudi strategy and it will live another day. betty: clearly it has been working so far looking at the shale industry in the u.s. not when it comes to the price. exactly. i'm told the meeting lasted four hours plus. what do you read into that? was there a lot of disagreement during this meeting, ryan? ryan: i think there was a lot of disagreement even before this meeting began. unconventional
meeting yesterday. the fact that this is still going on means that there is a lot of disagreement in the room. they're probably watching the price, by the way. they are below the 30 day average. if we close below $40, these guys know that it will be a huge pain even to next week. betty: ryan chilcote in vienna at the opec meeting. the act of the jobs report and what is going on here in the u.s., though gross says that the federal reserve is ready to go with a rate increase next month. he has been talking about that for quite some time. he joined bloomberg television and bloomberg radio shortly after the data came out. bill: there are certainly set to go and it's something that i've been encouraging for a while, not because of the tightness of the labor market or the fact that wages are increasing. as a matter of fact, wages were a .2%. year-over-year is up from the
standpoint of wages. the fed is ready to go because of concerns on the real economy. it's going to be an interesting experiment over the next three if they shift to a new policy and terms of determining the fed run this fund great. -- determining the fed run rate. reverse repos as an audit and they will have to work with that. they're going to need at least three months to make sure that it is smooth. tom: you wrote about why the coyote and i do not think that translates in paris 20. please address for the international audience how janet yellen came avoid international mediocrities, including the challenges mario draghi has. bill: the fed has sort of fact off of their qb almost 12 months ago.
girardi continues. -- mario draghi continues. yesterday statement was quite interesting because he gave the markets most of what they wanted. he is still in a whatever it takes mode. he did give them quantitative easing for six more months and included additional assets. diminutiveike a very type of forward statement. the market sense that the amount was not increased and perhaps the ecb is the last bastion of quantitative easing and easing monetary policy is at its limits. tom: this is an incredibly important question. how many billions of dollars did you lose yesterday? christopher: oh no, i made money yesterday. bill: [laughter] i sold lots of calls on the
what do we start with? >> to came out in the past few weeks and they both take a different approach. the first is the newer way. this is called the s&p spider fossil fuel free etf. we know you like the s&p 500, but we are going to surgically remove fossil fuel. what you get is the removal of 25 oil and gas companies and get about 5% less energy. the upshot there is that you would use it as a core allocation. it is 99% correlated to the s&p. you do not have any extra volatility. you're getting your exposure. it may lack of energy lags and it may go up. it is cheap at .20%. it is priced where the s&p is. there were some low carbon etf that the yuan seated last year that do the same thing. you say that is 98% correlated to the s&p, co not
taking very much risk at all. eric: you're not messing with your exposure very much. you're just surgically removing oil. a lot of constituents and institutions and clients are really interested in this. they do not want to give money to these companies. the other way is that you throw climate leaders etf. this is an the debate of a lot of clean energy. they got the companies doing good things. this is the other way. matt: it is not just clean energy companies. if your company says, we're going to do our best to be as green as possible, they recognize that company by including it. eric: in this one, yes. it is pretty liberal. they put an companies are doing good things for the earth, but they charge .75%. it's addingight, so volatility. then there is the third way which is really the most popular so far.
it is just going after a sector at the guggenheim solar energy etf. it is super volatile, but you're throwing your money at companies literally out there struggling trying to make it work in developing solar energy. one can go up 100% and down 50%. you are literally giving your money could it is sort of like an add-on to a portfolio. matt: etf friday, thank you so much. eric, he is our analyst. we'll take a quick break on "bloomberg markets." stay with us. we'll be back after the short messages. ♪
doing to focus on sustainability is what is happening at cop-21 conference in paris. tom keene is there with special guests. take it away. tom: thank you. , the lord mayor of sydney australia is joining us. i suggest climate changes different in australia. the floods in queensland from a number of years ago. fire is to the southwest of sydney. center in theand polarity that can happen from climate change. >> our biggest challenge is heat exposure and bushfires. impact ugly on the city. but the heat in the city years of thing -- in indonesia with those
fires moving up to malaysia, what is the urgency you bring in these meetings? more common, i suggest you bring an urgency. >> we do. we are the joy is continent. we have extreme weather anywhere. last week, we have the hottest day in november ever. 43 centigrade. tom: help me, please. [laughter] so we are in for a long, hot summer. this is our major issue. tom: what are we learning. what has surprised you? it has clearly been successful, but what have you learned of the last few days? was critical that we all came. i think it is critical that
national leaders have -- realize city leaders have a lot to contribute. 70 to 80% of the missions are in cities. city leaders understand what they need to do to bring omissions down. we want the leaders to work with us so that we can keep global warming below two degrees. tom: we know the mining industry and oil industries have been beleaguered in australia. how do you respond to the people of australia that want to recover mining and the hydrocarbon industry given to a long-term pressure to use less hydrocarbons? really have a choice. decisions have to be made. we preferred to have leadership from our national government and we have not. so we are taking the action we can take up those emissions done.
we are committed to getting omissions down 70% by 2030. tells of the vibrancy of sydney. i think of the terror attack there. it and saydismiss was a smaller attack, i do not think there is a difference between the agony of harris and what happened in sydney. pairs and what happened in sydney. >> perpetrator and two people were also killed. it was a shocking experience. he said he was doing it and the name of isis. we know it was someone who should not have been out on bail and had a violent background and was mentally ill. terrornot have
connections, but he did it and the name of terror and he terrified sydney. we perceive australia and sydney as being distant. how has sydney changed with that attack? >> it is global now. in syria, together with france and america. we have a multicultural society. we are harmonious. when muslim people were ,ictimized after the cafe people commiserated in came together. if they said that they would ride with those people. the tweets sent out. we have a third record as being a harmonious, multicultural community. record as a good
being a harmonious, multicultural community. mayor, thank you. clover moore, mary of sydney. betty: thank you, tom. be sure to watch a special from the conference, changing climate, changing business. ondiscussed the impacts markets with mark carney. 8:00 p.m.tonight at and 11:00 p.m. eastern times. investment landscape is about to change. the ecb stimulus yesterday and now the almost certainty that fed -- that the fed will hike rates following today's jobs report. for is spelling bad news emerging markets. the msci index down two weeks in a row. is founder oft
jaguar growth. we have seen emerging markets chin with the central banks. will there be more opportunity in 2016? emerging markets represent great opportunity, but volatility in the meantime. counterpoint, a rising rates, it is still slow and steady in the states. but year him is volatile. we are seeing those swings now. it is starting in china. and that use the, with their diverging policy moves, does that make it harder to invest in emerging markets? much harder, i think it pains this parallel. stable, is viewed as
strong. low single digits. forever. there is a visibility and there is a liquidity. a safety that the u.s. attracts. been the opposite. now there is such a dichotomy between the two. investing inss of emerging markets, we are that much more rewarded for being disciplined. betty: you have been in emerging markets for so long. residual is one area that you a long in for quite time. but they game continues to change. made remarksident in reaction to impeachment proceedings. she says we have to defend ourselves from a coup attempt. those are strong words. strong.ere are it is important to have
historical context. brazil was an explorer colony. form ofing through its institutionalization for the first time. ,or decades, this corruption this extra cost through inefficiency for those of us who have been active in residual -- in brazil -- it has never been right. cleaning has begun. brazil,itutions of congress, the federal police, have acted independently, strongly and shown the fortitude and the vision to make brazil a better place long-term. this is a first.
imprisoning a sitting senator is a first. one of the most prominent financiers. akin to one of the heads of a leading wall street firm. betty:? this is the head of btg? gary: exactly. that is shocking. first movement. there have been 20 previous attempts. this is the first one to rise to that level. betty: that is significant? gary: it is. but the person leading the charge also has controversy associated. this is layered. there is a process. i appreciate that dlima is strong and announcing her intent, but they will try to get two thirds of the vote. then congress will formalize and she will have six months to defend.
is, ultimately, then the vice president steps up in advance of elections in 2018. it is from here, probably, to 2018 will be this phase of house cleaning. betty: is that ok? brazil, thatr in is a pretty big hangover. gary: absolutely. this idea of seeing through it, through the noise, that is essential. it is noise and volatility and potential down drafts. the brazilian currency is down 50% this year. the worst performing currency. could it go lower? no doubt. is there a rally because of people believing there will be improvement? we do not put much stock in that
fire -- in that either. i think there is intrinsic value to assets. is a special country. 200 million population. it is youthful, aspirational. rising middle class. over 50 important cities. there are five regions that matter. it is akin to the lower 48 u.s. states. betty: great to see you. gary garrabrant jaguar partners. still ahead, the mayor of l.a. on climate change from paris. ♪
this is "bloomberg market." earlier from the mayor of sydney from the cop21 conference in paris. i want to go back to tom keene with the mayor of l.a. thank you. this is it. he either fix it or it will never go away. l.a. fake state years ago. i remember the horrific pollution of los
angeles. it is essentially gone. with us, their mayor. basic idea ofhe what everyone here can learn all about what they actually do in governor brown's california. is so muchtti: there acknowledgment of the problem, pledges to do things, that this is about taking action. turnng up, my lungs would
on the playground. i talked to my chinese counterparts in places like beijing and we share the experiences of we did right and we are still looking for the in the midst of age routes. we are talking to australia to have more water friendly plants. tom: how can republicans and democrats worldwide get together as they did in california. where does that will come from to help every
city? mayor garcetti: ice think the prediction that this would be bad for the economy is want -- what brought them together. we have seen gdp co-op in the state. gdp in seventh largest the world, if he were an independent country, while greening the state. this was not jobs versus the environment. this was jobs and the environment. and the fiscalit
challenge in the size of los angeles. of thenomic recovery state and l.a. has been job dropping. you know the magazine covers. where do you go now? you have prosperity back, but what is next? mayor garcetti: l.a. is a curious town. we are always reimagining thing. tesla now thinking through hyperloop, which is potentially changing the way we travel city to city. i think we are always pushing the boundary. controlling the port, the number airport,e country, the the busiest in the world, we are experimenting all the time. trying solar, doing plug ins for huge ships in the port. there are wide sets of americans with genuine fears
about the scale of immigration. how do you respond to genuine fears? mayor garcetti: fears come from if there'slace, but not the reality. los angeles is a story of immigrants. the first people who came to los angeles reflect today's .iversity in los angeles, we do not have that sort of fear. 65% of us are either immigrants or their children of immigrants. mexico,ts from immigrants from eastern europe. we are always thinking how the cultures push us forward and give us greater economic output. two more questions, one on climate change. the mayor of sydney, australia talking of record heat. more than 100e degrees fahrenheit, can you?
mayor garcetti: we had a hot summer, but the sustainability 50n i have will reduce by degrees fahrenheit the heat island effect in l.a. by painting the roofs white, planting trees. those can reduce in an urban environment that temperature. we have the hottest summer and it never stopped. tom: unfortunately have to ask about the shootings in san bernardino. governor brown delayed his trip. mayor garcetti: i delete my trip. i was on the plane. we lost the boyfriend of someone who works in my mayor's office. it was devastating. fractured's always a his between the mega-city and the police chief. i have theiri: back and many of them flew out
to be with san bernardino colleagues. our swat team was there. you just connect of the community. you push them so every time you make a stop, say hello to the high school. make sure police officers get to know them and vice versa. who is worse, the boston red sox are the los angeles dodgers? mayor garcetti: can we just agree it is the yankees? tom: thank you. the mayor of los angeles. .etty: thank you tom keene in paris for us. watch the special from the conference here. changing climate, changing business. john nickel for weight discussing the implications of climate change on the market with mark carney. that airs tonight at 8:00 p.m. at 11:00 p.m. eastern time.
back to bloomberg television. i am betty liu. republicans and democrats teamed up to send president obama a highway funding bill. it would be paid for in part by federal reserve dividend payments. a move that janet yellen said a bad president. pay is the billy big enough step in addressing the crumbling infrastructure. joining us now is henry cisneros .
great to see you. we will get to your new role in this firm, but you say this will -- even though i know it hast had its critics -- is a positive step. henry: it is collaboration on a bipartisan basis in the new ryan era as speaker of the house. it is a positive step of breaking the gridlock. this is the hundred $5 billion over five years. while it is not perfect in the sense everything is funded -- the out years yet to be founded -- it has a lot of elements, not just spending for roads and master asked it -- and mass transit but also authorizations to think of the future in terms of public-private partnerships, in theions in technology
transportation system, exploring ways to move freight from reports to realtor trucks etc.. it is a big step. to a big step for the u.s. take while this climate conference is occurring. context.od but this highway bill is a hodgepodge of funding that it is more a testimony to congress' incompetence is what barry ritholtz said. this is a glass at least half full. this is bipartisan collaboration. this is new innovations. expeditings about permitting so that you -- with federalaling bureaucracy, localities have more voice and avoid vocations. many positive things. but in lightfect,
of what we have been watching in washington, this is forward process. muni trading in general, the volume has gone down. why go into this? this is about infrastructure. this is about water and roads and power and municipal needs across the country. it is a huge area of future progress. and those things that the american council on engineering gives a d, there is $1.5 trillion worth of needs. having been a mayor and hud secretary, i am aware of the in theructure needs country. here is a firm that included the investment of that iconic name, muriel siebert, who when she passed, her portion of the firm needed to be addressed.
i was asked to step in and give capital. we will build what is one of the most capable underwriting firms looking for a way to bring private capital into infrastructure. i think we are on the edge of a major inflection point in the country recognizing its infrastructure needs. yesterday's action on transportation was part of that. betty: it is good timing. henry cisneros, thank you for joining us. secretary and one of the founders of siebert brandford shanks. ♪
betty: from bloomberg world headquarters, i and betty liu. is the fed ready for liftoff? after the november jobs report top estimates, i will talk to mohamed el-erian. oil prices plunge as opec ministers reached their output ceiling to a level in line with current production. getting back to reality. we are 90 minutes into the tree being section -- session. ont miller has the latest the markets. we are reaching a fresh highs. in more ways than one. look at the equity markets. gains of 1.5% on the dow jones. points, giving us that what we lost yesterday. the s&p up 1.4%.
the nasdaq gaining 1.5%. i am talking about futures' bets the fed will raise rates. we are almost added new heart. i have w.a.r. p up. 76% is the chance that the futures markets prices in the fed will raise rates. muchrend has been pretty all of the economists we survey see an increase in rates. betty: also -- that is right. now we are moving higher and higher into the prediction. but the treasury markets, we were talking about how odd the move was. matt: it was, but who did not the payrolls number was going to encourage janet yellen to raise rates?
if you look at the two year yield, there was a short spike. investors want this bond and that pushes the yield down. the ecb same thing if you look at the 10 year. ucb sam's thing if you look in -- you see the same thing if you look in gold. more interesting is oil. oil dropped after bloomberg news reported the ceiling for opec's production would be raised rather than lowered, which you might expect. i just want to point out on the isrg terminal, opec a great function. it gives you so much information on opec. saudi is the biggest piece of the pipe. they produce 32% of the oil that all of opec makes. one of the few opec makers that has excess capacity of.
they could produce more but they do not. everyone else with the exception nigeria, produces as much oil as it can possibly get out of the ground because they need that money. betty: at some point during this year, they were producing as much as 32 billion barrels. they'reat is when ceiling was only 30 billion barrels. they are always producing more than they are allowed to because saudi can not hold the poorest states in check and those states are asking saudi to cut their own production. betty: thank you. now let's check in on the bloomberg first word news. courtney donohoe has more. the california shooting. a new report may give investigators more clues behind the motive. -- theociated reports associated press reports the
allegiance tod isis on facebook then deleted the posting. its lack ofdmitted refugee policy is a problem. it is calling on emergency workers to monitor the borders. some european governments have threatened to kick greece out of its passport free zone. lawmakers in germany approved sending warplanes into syria. it is seen as the most dangerous deployment of forces yard by chancellor angela merkel. germanyrs ago, she cap out of international intervention in libya civil war. president demo recess allies have asked to squash the impeachment attempt. she said today she did not do
anything that justifies impeachment. house republicans have voted more than 50 times two delay or repeal obama care. for the first time, they are on the verge of sending a bill to her president obama's desk. the president has promised to veto it. democrats in congress have the votes to block a republican overact. that is a look at our bloomberg first news. you can get these stories and more 24 hours a day at bloomberg.com. betty: thank you. it has been a volatile week for stocks. the snp climbing its way back. for a closer look at this week's market movement, i want to bring in all of her rented. give me your take on this reaction.
oliver: i think it is good. journalhawkishness and hawkishness for the economy boosted stocks. good -- that we have a what is that this is bailing out markets is solid. in yesterday's move was pretty pronounced. some may go as far as to say over extended in terms of loss of stocks. the fact we are rebounding seems to make sense. but ultimately, it is a volatile week. you have four days with moves larger than 1%. we have not seen a period since august, which was bad. this was not so bad. there is something for everyone. some for bowles and some forebears -- some for bulls and some for bears. betty: does this set us up for a
rally? oliver: there are indications be good.mber will a 1% gain with nothing going on. there is some sort of self fulfilling pattern that people know december is good. but the one item that could derail us does not seem to be incurring. -- occurring. of ecb shocked in terms moves across the market. now that you have the positive reaction to jobs, there is no reason to believe that when the fed goes into december that markets may view that solidly. if they do that for the right reason. it should be good. betty: will it change anybody's outlook? you talked to a lot of strategists, traders, does this change anybody's outlook? on their markets and targets? oliver: we look at 2016. there are about 9 wall st
strategists that we survey. about 2200 ors above that. people put their best on the table. tslot of those bats -- be included the idea that the fed would go into december. i do not think the fed moving will derail that unless the fed leaves it open to every potential fomc meeting with the potential of a rate hike. inhink they will be dovish their language. but we are going the first move and whatever you want next year, you may feel more volatility. but i think of those strategists will keep on target so we are all bullish. betty: we saw the finish of the trading session today, but looking 10 next week, is there anything that could the rail --
derail a rally? oliver: i think the recovery throughterday gets us december 16 or 17 until the fomc decision. usually one we see the week leading up to those this is ends, you may see anxiety appear there are people who want to see a dovish fed. there are people out there somewhere that think maybe be fed will not go. anything toe, but set us down. who knows? unless there is a surprising event -- betty: you never know. all of the run it, thank you. it has been a wild week for avon after news of a potential deal. concerns of aing fire sale of the cosmetics company. ♪
betty: good morning. welcome back to "bloomberg market." time for the bloomberg business flash. a healthy rate of hiring is increasing the odds the fed will raise rates this month. employers added 200,000 jobs, more than forecast. fed chair janet yellen has been signaling the economy is strong enough to withstand a rate hike. norfolk southern told canadian pacific your offer not good enough. the railroad rejected the $28 billion bid. norfolk southern calls the offer grossly inadequate. that opens the door to sweeten
the offer and take it to shareholders. the u.s. justice department accused the former leader of brazil's soccer program from getting kicked ask after signing an agreement. nike was signed with the brazil's national team at that time pay the company says it is not aware of any kickbacks at corporate in is with authorities. avon products investor barrington capital group bears urging the company to reject a reported deal to sell its north american business at a fire sale price. the stock has been moving substantially. it is up almost 11%. joining us now is lindsey rupp. first off, it seems like avon has been in play for quite some time. particularly its north
american unit, which is its worst performing unit. overseas, the model still have jackson, but here, no one is opening the door for the avon lady. they are looking to unload that business. betty: that has been pushed around by rumors, right? some of them are crazy. who is likely to be a buyer? lindsey: the latest rumor is that they will sell it to you. you. some activist investors have taken a stake and say do not sell at this level. you need to change management, you can cut costs, you can still save the this. these are the investors in avon. betty: what kind of price they are -- what can of prices are they talking about? not beenit has discussed now, but if it is where it is now, it is like four dollars which is up 10%. betty: can you pull up a chart
of avon since it went public in the 1940's. it is basically trading below the opening price then. there are so much that happened in between, but it shows you the trajectory of this company. lindsey: it has been having real problems, in north america particularly. brazil where it has seen strength, the currency move there has heard them. it is facing challenges worldwide. investors are looking for there to be some sort of change whether a sale or a change in leadership. betty: what is attractive about it? what is attractive about the north american business. lindsey: it has branding. it does still have loyal followers. and beauty is hot now. betty: is the avon lady still out there in the u.s.? are are still
avon ladies in the u.s. is on fire now, particularly online. you see all of these new startups. sephora is out there, killing it. industry toterrible get into as a private equity. betty: so they are not interested in the overseas portion? lindsey: overseas is the stronger part of their portfolio. they have seen challenges in but the north america business is the one they are really looking to unload, people think. betty: lindsey rupp on avon. just checking in on the markets now, which are hovering near the highs of the session on the back of this jobs report better than estimated. matt miller has more.
matt: you and lindsey are talking about avon which is mainly a beauty supply -- that is what the avon lady sells you. alta is a $10 billion stock that distributes beauty supplies. it had better than expected earnings, sales, and outlook. as a result, it is up without even having activist investors, in an request it reject a hostile bid. it is up almost 11% now. barnes & noble is the other story. company that missed sales estimates, missed earnings estimates. it had sluggish internet sales, especially over the holiday season. it has had an issue with the declining sales of the nook? remember that? betty: a rubber that. it is still out barnes & noble's the. -- though.
matt: it is just not selling as well. norfolk southern is an interesting story. we have been covering this closely. canadian pacific wanted to take them out. norfolk southern's ceo said forget about it. we would rather go it alone. as a result, investors are selling off the stock. they may not have a lot of thing in that company as far as going it alone is concerned. oil is a great story today. a minister slipped out of an opec meeting and told us out bloomberg news may will raise the ceiling rather than lowering the reduction ceiling which is what a lot of countries involved wanted to see. as a result, oil dropped in price. i want to show a quick chart i put together that shows saudi arabia, which produces the lion's share of opec oil. their output continues to rise
since before they ecb's grand disappointment. we did not have a chance to debate the ecb. check out this chart. this is the stoxx 600 over the last couple of days. yesterday sinking by 3.1%. you have done your best to drag the stoxx 600 up on the back of the u.s. jobs report, but you have not quite succeeded, have you? betty: and of course, now it seems much more certain in the u.s. that you will see this interest rate rise. and bonds resumed their slide. but there is some respite or the euro, right? mark: there was. yesterday, it was a one in six year phenomenon. look at this two day chart. rising by 3.1%. it rose against every one of its yesterday.
today, no surprise to see the euro commenting back. the market was remarkably bearish against the euro ahead of this meeting. in my battle of the charts, i telling you how expectations for the euro came down from $1.10 to $1.06 through the last meeting through yesterday. but what a surprise. that is the reason we saw the move up. you know the story about robin brooks, the goldman sachs currency strategist. he released yesterday that note that because he expected a dovish ecb, he expected a 3% move in the euro. he got the 3% right but he thought it would go down. instead, it moved up. he did admit his mistake. brave man, saying on the morning of a central bank
meeting that a currency will fall 3%. it was a huge letdown. betty: it was. mohamed el-erian will join us in just a few minutes. his take is do not blame the ecb and mario draghi too much on their "pork indication to the medication toor the markets." why not take that as a look that the markets are too dependent. why be so dependent on central-bank policy, can we get off that? mark: you can feed the beast. to quote one analysts, trunk on the central bank loosening. what they want, you are in this feedback loop where you are both responding to each other. look at their reaction in the european bond market.
when the ecb met in october, you had one point three $8 trillion of the european bonds that had negative yields. moved up to $2.2 trillion. the market was front running the ecb. i guess that is what mohammed is saying. it will be fascinating to hear his view as to what the ecb does did notcause draghi leave the door open for more using. the cut and the deposit rate was adequate. he said we will do what we need to do if we have to do it. but he did not really paved the way for more easing, did he? betty: absolutely. we will talk more about that. we will not only talk about that but also opec. there is a little bit of a surprise as well. some were betting that they
would cut production and they delivered more. mark: if you will just now, you would be incomplete shock. because were they're not supposed to be cutting production? delegateear about this that left the meeting and hearing that they have raised the output ceiling. there is a shocker. it reinforces the saudi arabian view that we will not cut production and we will not give into market share. i'm looking forward to speaking with you and mohamed el-erian in a few minutes. the european close is next. stay with us. ♪ sure, tv has evolved over the years.
markets: european close. breaking news now out of the opec meeting. their statement on production targets. i want to get to ryan chilcote in vienna. crazy stuff. the secretary-general of opec is speaking right now and he just announced that the delegates were unable to reach a decision about the production ceiling. they decided, according to the secretary-general, who is giving a press conference right now, to wait until their next meeting, which will not be until june, to agree to a number. this is extraordinary, if you think about the fact that, just a short while ago, we had an opec delegate telling us that the number had risen from 30 million barrels a day to 31.5, and now about four hours after, as all of the ministers storm
out of the room not commenting, --are hearing that has not there has not been a decision to raise the targets. they have decided to kick the can to the next meeting in june. betty: the price of oil had been coming off of its low after the news, about the production .arget being lifted now the price is coming down a bit. essentially, i think we are trying to digest what all this means for the oil markets. >> it has caught everyone here by surprise. this is very unusual. i would not say unprecedented. ago, opec was unable to agree a production ceiling. it doesn't do anything for perceptions of the cartel of reach ability to decisions. clearly, there was a lot of disagreement in the room. at least six members were calling for a production cut. many of the members, certainly
saudi arabia, its allies, the four goal countries that have the most spare capacity to , orally turn off the tap pump up their output, would be saying, let's carry through with the strategy of allowing least not to rise, at cutting it, pushing out the high cost producers. if we do that, that will get rid of the shale producers and then the price will start to rise again. this is perhaps the most the audit conclusion to an opec meeting i have ever seen. betty: absolutely a shocker. thank you, ryan. now i want to head over to paris, where the climate change conference is being held. joined byis being mike bloomberg, who has been named as the chair of the climate change risk disclosure
task force. also, robert redford is with you as well. yes, they are. i can tell you without any question, all the women of mikeberg do not care about bloomberg right now as they meet with mr. redford. a wonderful close to the day here. course, it was led by the thoughts of mayor mike bloomberg. what were your thoughts today? >> 400 mayors from around the world all understand we have a problem with pollution and are all determined to do something about it. they said their constituents demand that they solve this problem. that is why they are here. the one that deserves a lot of credit for bringing them here is moon, the secretary-general of the united nations. he said cities is where the
people are, where the pollution and the solutions are. he wanted us to push the national governments. when the national governments do something, pass a law, it is where the city where the execution is. so the mayors are delivering these services. >> you studied engineering at johns hopkins. measure and disclose. congress does not really do that. >> the head of the bank of , on behalf created of the g-20, an organization which i'm lucky enough to head, that will try to collect data on who is doing the polluting on a comparable basis, and make it disposable. once that happens, businesses will have to clean up their act because their stockholders can say, we do not want to run any risks. stop the pollution or we will value your company less.
they can turn to governments and or country,her city people are living longer, and here is why. if you have the data on a comparable disclosed basis, that is enough to get people to act. you were in santa monica as a kid. you could not see the san gabriel mountains. >> i could when i was a kid. how do we get that will in los angeles to happen in washington, other cities and nations around the globe? >> that is why i'm here. i even support of mayors. i think they are closer to the ground and closer to the people. because of that, that is why i have put my commitment mostly toward mayors, mayor bloomberg, others across the country. i think they can be part of the solution, they can move things quicker.
things are too politicized in washington and congress is too politicized. stuck, so it has to happen from the ground up. tom: you are out in front on the environment. you are talking about it when it was not popular. which movie itr was very clicked in for you, but what has changed? it is upon us now. climate change seems to be upon us now, when you had to start 30 years ago. >> i did it because it was a personal thing for me. at theup in los angeles end of the second world war, and it was a beautiful city. without going into details about how it ceased to be a beautiful city, it has to do with development that was out of control, and was concerned about pollution. it in it i experienced i experienced smaller, traffic overload. when i was little, it was not
there. i went into the sierras and yosemite national park. -- nature gave me opportunities that i was not aware of. once i understood the value of nature, and if you leave it alone, there is something quite good about it. that is why i became involved. tom: not much nature in new york a shockt the idea of and all in the article the other day about how much coal burning in china. a stunning upgrade. >> that is true, but it is also true that china is the leader in producing wind and solar power. been using less coal per capita for economic development than before. i think china will be the most pro-environmental country in the next five years. they will go way beyond coal.
in the big cities, you cannot see it across the streets. the public says i do not want to breathe that there. water that may give me stomach cancer. i do not want all of these things that will shorten my life and make my health worse. governments have to respond. thing,as done an amazing they brought 150 million people into the middle class, and those people are saying, i want the things that the other middle-class people have elsewhere, particularly health. in beijing, they have put a smoking ban in. the chinese government owns this a good companies and they have put in a cigarette been. this would be like philip morris putting a ban on smoking in their offices. they are going to have to do this all across the country. easy, but they have a government that understands, if they don't do something, they have a problem that will not let them survive. tom: i don't want to get into
politics, but i do want to get into the politics of the will of the american people. suggestord, do you there is a shift going on in a broad spectrum of america, turning away from politics, and just saying fix it? >> absolutely. we can see that by some of the possible candidates running for office. going to be trusting outsiders because they are fed up with the political system because it has been stymied. they want action. for me, it is all about the people. the more you bring the people into the picture and let them know that they are the ones at stake, whether it is employment, health, or what have you, then i think the people will speak up. that is why mayors are so important. they represent the people. tom: i believe you write the paycheck for tom keene, but i believe, building to building,
in new york, everyone is trying to save energy. utilities of the city, trying to reduce consumption. recruit out of college, they all want to know what we are doing about the environment. it is a really big plus in recruiting people. and company pension funds want to deal with people who are environmentally responsive. they get pressure from their beneficiaries. if you look at what is happening with the american public, 80% of requirementscrete on our federal government to do something to reduce greenhouse gases. wanto 90% of gun owners some regulation so that people with psychiatric problems or minors, or criminals, cannot buy guns. this is what the public wants. you hear what these people say when they are running for office, but that is not where the american public is.
once they get to a general election, you will see, all of a sudden, they will have to turn overnight or else they will not get elect did. the american public is smarter than anyone thinks. these would be elected officials are pandering to a very small ,roup of people who are unfortunately, not current with what is in their best interest to give them safe and healthy lives and keep their kids safe. i was not worry about the sideshow of these elected officials. look where the public is. every poll shows they are concerned about their health and they want the government to do something about it. people and for young women. i think women have a greater role to play, and their time has come. and i think it is good. i have kids, grandkids, and i see how they are. , i have ar generation
lot of hope for. they want to be given the reins. they say, you have had it for a while, what have you given us? give us the reins, we are ready to do something about it. tom: how do we bring the energy industry into this debate? i spoke to an official from norway today about how they are moving to natural gas. bloomberg, how do you bring the hydrocarbon and mining industry toward a constructive outcome? >> the market is doing that. coal stocks are down 80%, 90% in some cases. there are disruptive technologies that come along, different requirements, the way people live and what they want to buy, how they want to get their products. all companies have to learn to live with this.
companies like exxon mobil are not stupid. they are trying to clean up their act, make products more acceptable. the same thing with the full sugared beverage companies. they are try to find other products at the public will find excessive dual -- acceptable. no business will deny climate change. look,ss executives say, if there is a perceived risk with a decent probability of it happening, i am going to take precautions. i will buy an insurance policy, i will move my building, i will strengthen the roof, whatever it is. business executives don't have the luxury to sit around and say this and that, this is a plot, nobody believes this is real -- you don't have that luxury. the same thing when it is your family. do you want to run the risk that your kids will be hurt? riskng about how big the is is not smart. take the precautions. tell your kid do not cross the
street. i know sometimes you can get across without opening your eyes, but it is not smart. congratulation so much on your event. it was wonderful to see you and president francois hollande. robert redford, thank you. thank you so much, great interview with mike bloomberg and robert redford. be sure to watch our special on the conference, changing climate, changing business. the implications of time -- climate change on the markets with mike bloomberg and mark carney. that airs tonight at 8:00 p.m. and 11:00 eastern time. let's get back to the markets. opec ministers meeting indiana announcing that they would leave their output targets unchanged. the nigerian minister coming out and saying opec decided to retain reduction at 31.5 million barrels a day. the latest jobs report showing 211,000,olls rising by
better than estimates. the probability that the fed will raise interest rates jumped to a new high of 76%. joining us to make sense of all of this is mohamed el-erian, our bloomberg view columnist, and former pimco ceo. if you are looking for some stability today, you have opec coming up with some crazy headlines here, you had a good jobs report, it seems like the fed will raise rates, but the ecb under delivered. how do you make sense of this? mohamed: this is the fluidity that we have been talking about for a while. you have so many moving pieces, each can be explained on a standalone basis. the difficulty is bringing it together. that is why we will have quite a bit of market volatility. right now theh direction in equity markets is up, based on the likelihood that
the fed will raise interest rates. raises by 25 basis points, that is your scenario. then what happened? first, volatility means up and down. today, wonderful news on a solid jobs report is being interpreted favorably by the markets. that is what you want. good news in the economy to be good news in the equity market. like everyone else, i'd expect the fed to hike in december. they will announce on the 16th, 25 basis points. i think we will have a second hike soon after, and enable wait. is the will end up with loosest tightening in the astory of the fed, which is very slow path, and they will end up below historical averages. to bring in mark barton, as we are here with the european close. mark: i am chomping at the bit to ask you about the ecb.
does the market reaction to the yesterdayunced that -- announcement yesterday, that the ecb failed in its communication, or does it highlight irrational exuberance among market participants? mohamed: a bit of the first and a lot of the second. you said yourself, the market has been drunk on central bank stimulus. imagine someone getting drunk and suddenly the bartender provides a somewhat smaller beer . the reaction will be pretty strong. that is what you have seen. i have little sympathy with the notion that the ecb miscommunicated. sympathy withore the fact that we have an unhealthy codependence between the central banks and the markets. thatcodependence means people are pressing the other side to do even more.
at some point, it becomes unsustainable. if the ecb ultimately will have to do more, which many say -- just look at the consumer price inflation levels, point 1%, core prices in the eurozone, .9% -- why not just bring out the grand bazooka? the expectations of the ecb's ability to hit its price goal of just under 2%, you would not say they are exactly optimistic in the marketplace. if you are pursuing an objective with imperfect instruments, you have to end up concluding what chairman bernanke he did in 2010, that it is about benefits, costs, and risks. you have to keep assessing the balance between benefits,, and risk. there is now widespread recognition that central banks,
on their own, cannot deliver the goodness economic out comes. the systemy time for for the politicians to respond, but they cannot buy time alone. comes at a cost of resulting in collateral damage to asset allocation, asset prices over the long-term, financial stability. it also comes with unintended consequences which is affecting the economy of central banks. will the ecb hit its goal of under 2% in roughly two years, yes or no? mohamed: probably yes. mark: and that is without stimulus or the stimulus it announced yesterday, that draghi says is adequate? mohamed: they will do more. there, we haveay some breaking news from
barclays, which we hope we can ask you about. we are hearing they may cut the firm 20% of investment banks. most of the losses will be in asia and the global equities business. the chief executive is seeking to shore up profitability. this is according to people familiar. the equity securities division in asia, which operates in japan, hong kong, singapore, is not considered competitive and profitable enough. the cuts, which would come on top of an existing program to eliminate 7000 jobs at the investment bank through 2016, could be announced early next year. a spokesperson is saying the bank is constantly monitoring our opportunities in different geographies and businesses. jen staley is passed with
betty: welcome back to the european close. with us is mohamed el-erian and mark barton from undimmed. mohamed, i want to get back from the fed. -- from london. the philadelphia fed president saying, my fear is at the federal reserve risks losing its credibility and only adds uncertainty to the economic landscape along with the committee waits and normalize monetary policy. that sounds reasonable but also raises the question of whether
there is a real reason, is there a true reason for the fed to want to hike rates in december, is there a real justification here? mohamed: absolutely there is a real justification. it is almost impossible now for the head -- fact not to hike, unless we get a major catastrophe. today's employment report was robust in a very encompassing manner. a green light from one objective, which was employment. bettere also having indication from wages and inflation. they also have to worry about financial stability down the road. so it is hard for the fed not to hike at this point. were up onlywages 0.2 percentage points. still a very small increase here. true, and unfortunately, the headwinds to
wages are quite structural in nature. when oneo be careful looks at that number. we have fundamental changes going on to the labor capital next and to productivity. one has to note, there are major structural changes going on as well. betty: why do you think the bond market reacted the way they did to the jobs report? so, you are getting also an adjustment to what happened yesterday. yesterday was a remarkable move in markets. how often do you see the dax moved 3.2%, look at interest rates. a lot of what is happening today has to do with a reaction to yesterday. yesterday, i think the markets overshot and you are seeing some retracement today, and in addition, the impact of the jobs report. betty: great to talk with you, thank you, mohamed el-erian.
mark, let's get a quick last look at where markets have closed in europe before we say goodbye. mark: it was all about the ecb. atlooks like the stoxx 600 finished its worst week since august. gauge losing 350 billion euros of value. take a look at the ftse 100, dax, and cac 40. that we will not see more stimulus in the future? that is the big question going forward. that is it for us, bloomberg markets: european close. see you on monday, we have a weekend of rest. more central-bank action next week. ♪
from bloomberg's world headquarters in new york, good afternoon, i am scarlet fu. are down sharply today. opec ministers decide to retain oil output at 31.5 million barrels a day. nigeria says of the cartel may meet again before june if prices keep falling. adds 211,000omy jobs in november, topping analyst estimates. does this clear the way for a fed liftoff this month? lyft forms a global alliance to take on uber. how will they respond? let's go to the markets desk where matt miller has been checking the numbers. we are clawing back some of the numbers from yesterday's job report. matt: take a look at the indexes to see where we are going. up across the board and we continue to